FTC eyes child privacy updates. What’s the impact on entertainment?

The FTC wants to make changes to the Children's Online Privacy Protection Act (COPPA) that could have a significant impact on the entertainment industry.

The Commission has proposed several amendments to the privacy rules that are meant to protect kids under 13, the most notable of which is adding geolocation information to the definition of personal information.

This would include tracking cookies that are used for behavioral advertising (based on other Web vists). The agency says the updates are "intended to ensure that key information will be presented to parents in a succinct 'just-in-time' notice, and not just in a privacy policy."

The goal, according to the FTC, is to find a balance between keeping kids safe and not overly burdening companies in this era of rapid technological changes.

Video game publishers are certain to be affected by this, especially those who make iPhone games. With the game violence issue settled by the U.S. Supreme Court earlier this year, attorneys have noted that online would likely be the next potential trouble spot.

"I think the next big thing on the horizon is privacy and security," says Greg Boyd, an associate specializing in entertainment, media and publishing with the law firm Davis & Gilbert. "I think you can take a look at what's recently happened in the game industry with the hack attacks and we're going to have to pay a lot more attention to that moving forward. … Children are our most sensitive area."

In May, Disney-owned Playdom paid $3 million to settle charges it had violated the Children's Online Privacy Protection Act. The company was accused of illegally collecting and disclosing personal information from hundreds of thousands of children under age 13 without their parents’ prior consent.

"It's less about the content in the online environment as it is in fair warning and fees," adds Michael Zolandz, partner at SNR Denton. "I think that's the big issue in the commission's context. It's not so much what children are able to access. It's hidden fees or circumstances where it's a free download that then smacks you with hundred of dollars in add-ons."

Film and television companies should be equally aware of the changes, though, as more and more children are watching programming online. And the preponderance of using Facebook and apps to promote shows and engage viewers is exactly the sort of thing the FTC will be keeping an eye on.